5.  The applicants were born in 1953 and 1986 respectively and live in Trakai.
6.  By a decision of 12 March 1992 the Trakai City Council leased a plot of land 22 square metres in size, situated at no. 41 Karaimų Street in the town of Trakai, to Galina Bogdel, the wife of Piotras Bogdel and mother of Snežana Bogdel. The plot was situated on land which was State property. The plot was leased for a term of five years, for the construction of a kiosk (pastatas-kioskas) for selling pottery and souvenirs. The applicants stated that by February 1993 the kiosk had been built and was ready for use.
7.  By decision no. 395v of 22 December 1993 the Trakai District Council established a territorial plan for the old town of Trakai city, on the basis of plans drawn up by experts on cultural heritage. The plans stipulated that plot no. 41 in Karaimų Street, situated at the entrance to Trakai castle, was not to be divided and was not to be privatised (“neprivatizuojama: salos pilies prieigos; ribos lieka esamos”).
8.  By a decision of 27 July 1994 the Trakai District Executive Council leased to Galina Bogdel, for a term of five years, a State-owned plot of land of 134 square metres, which consisted of the previous plot and enlarged it.
9.  On 18 January 1995 the Trakai District Executive Council adopted a decision approving the sale of the said plot of 134 square metres to Galina Bogdel for 2,874 Lithuanian litas (LTL).
10.  On 10 February 1995 a representative of the Trakai District Executive Council and Galina Bogdel signed the land purchase agreement. The land purchase agreement was registered at the Real Estate Registry and, in accordance with Lithuanian law, Galina Bogdel became the owner of the land.
11.  Later that year Galina Bogdel died and her husband and daughter (the applicants) inherited the plot of land with the kiosk. According to the applicants, they subsequently obtained the necessary permission and transformed the kiosk into a café.
12.  In July 1998 the applicants contacted the Trakai District Municipality to request the enlargement of the plot of land they owned to roughly twice its size by the addition of more State land. They mentioned that the building they had erected at 41 Karaimų Street was being used as premises for public catering (kaip viešojo maitinimo patalpa). As the number of tourists in Trakai was constantly growing, there was a need to expand the premises in order to meet the hygiene and sanitary needs of a public catering facility. The municipality informed them that a new territorial plan was necessary and by a decision of 28 July 1998 entrusted the coordination of the planning project to the applicants.
13. Once preliminary plans had been published in the Trakai town newspaper in August 1999, wide repercussions in connection with the plot of land in issue arose in the local community of Trakai. In particular, on 19 August 1999 ten residents of Karaimų Street wrote to the Head of the Vilnius County Administration (hereinafter – “the HVCA”), the director of Trakai Historical National Park and the Mayor of Trakai claiming that some time ago a small building had been erected on the plot [it was not clear whether legally or illegally], and that it had now been turned into a noisy café. The residents asked the authorities not to permit any new construction on the plot, which was in a historical place – Trakai Historical National Park – and right in front of Trakai castle and other monuments of particular architectural and historical importance (prie pat pilies, krantinės ir seniausių architektūrinių paminklų).
Further, in accordance with the requirements of the Law on Territorial Planning, on 7 September 1999 a public meeting (viešas svarstymas) was held in Trakai city. The meeting was attended by residents and the Trakai town authorities. It is stated in the minutes of the meeting that some residents feared the construction of a large restaurant on the plot of land in issue.
14.  In December 1999 a private person, R.L., who lived in Trakai city, wrote to the Committee of Education, Science and Culture of the Lithuanian Seimas. He submitted that Galina Bogdel, and later her heirs (the applicants), had been attempting to illegally obtain the plot of land situated at 41 Karaimų Street in Trakai since 1992, eventually succeeding in their unlawful endeavours. R.L. argued that the plot was situated immediately in front of Trakai castle in the Trakai Historical National Park and thus could not be privatised.
15.  By a letter of 25 January 2000 the Committee of Education, Science and Culture forwarded the letter to the Ministry of Culture and the State Audit Office (Valstybės kontrolė, hereinafter – “the SAO”), a body whose function is to supervise the lawfulness and effectiveness of management of State property, asking them to investigate the matter.
16.  On 3 July 2000 the SAO adopted decision no. 70, finding that the decisions to lease to Galina Bogdel and subsequently to sell her the plot of land in question (paragraphs 6, 8 and 9 above) were in breach of the legislation on territorial planning, including Article 5 § 4 of the Law on the Protected Territories, the Regulations of the Trakai Historical National Park, approved by Government ruling no. 283 of 22 April 1992, and the Trakai District Council decision of 22 December 1993 (see paragraph 7 above).
The auditors also established that the Trakai municipality’s decision of 28 July 1998 to put the applicants in charge of the project of enlarging their plot of land had breached the Law on the Protection of Immovable Cultural Heritage, in that it had not been agreed upon by the State Department for the Protection of Cultural Heritage.
17.  The SAO invited the HVCA to take appropriate measures in respect of the plot at 41 Karaimų Street “which had been sold to Galina Bogdel in breach of the applicable laws”. The SAO was to be informed of the HVCA’s decision within two months.
The SAO observed that the Trakai municipality officials responsible for the decisions to sell the plot to Galina Bogdel no longer worked in the relevant section. It nevertheless urged the Trakai District Mayor to respect the law when executing territorial planning.
18.  In the meantime another investigation was ongoing. On 3 November another auditing body, this time that of the Trakai District Municipality itself, found that Galina Bogdel had obtained her ownership of the plot of land in question in breach of the laws on the protection of cultural heritage and the relevant territorial planning decisions.
19.  On 24 January 2001 the Trakai District Council annulled the decision of 28 July 1998. The applicants challenged that decision in court.
20.  On 18 April 2001 the HVCA asked the court to annul the decisions of 27 July 1994 and 18 January 1995 permitting Galina Bogdel to lease the plot of land and selling it to her respectively.
On 21 February the HVCA asked the court to annul the sale agreement of 10 February 1995.
21.  Both cases were joined. The applicants then asked the court to dismiss the HVCA’s action, arguing that it was time-barred.
22.  By a decision of 11 July 2005 the Trakai District Court dismissed the applicants’ action and granted all the HVCA’s claims. It found that the time-limit for initiating court proceedings had not been missed by the HVCA. The three-year statutory time-limit had to be calculated from the date the HVCA had learned of or should have learned of the breach of the State’s rights. That date was 3 July 2000, the date when the SAO had concluded that the land had been purchased in breach of the legislation on the protection of cultural heritage, protected territories and territorial planning. The court also noted that in 1995 the land had been sold to Galina Bogdel by a Trakai municipality official. However, in the same year the Lithuanian legislation had been amended and different administrative units – counties (in the present case, the County of Vilnius) – had been granted competence to deal with questions relating to the management of State land. Even so, after assuming competence over the administration of State land, the HVCA had had no legal obligation to initiate checks to verify whether contracts concluded by the municipalities in the past had been concluded lawfully.
23.  On the merits of the case the Trakai District Court found that when concluding the agreements leasing the State-owned plot of land to Galina Bogdel and, subsequently, selling that plot to her, the officials of the Trakai District Municipality had breached the applicable laws and local regulations. Consequently, the court declared those agreements null and void. The court ordered restitution and returned the 134 square meters plot of land to the HVCA. No money was returned to the applicants.
24.  The court also annulled the agreement of 27 July 1998 by which the Trakai District Municipality had entrusted the applicants with coordinating the preparation of the local plan.
25.  The applicants appealed, arguing that more than six years had elapsed between the date the land had been bought and the date when the HVCA had initiated court proceedings for annulment. The applicants also submitted that the purpose of statutory limitation was to guarantee legal certainty. The stability of civil legal relations would be breached if a person could not reasonably expect the status quo to be maintained after the expiry of the limitation period. They also challenged the unilateral restitution. Lastly, the applicants argued that the lower court had erred in interpreting and applying the territorial planning legislation.
26.  By a ruling of 8 November 2005 the Vilnius Regional Court upheld the reasoning of the Trakai District Court. However, it ordered double restitution. The applicants were to be refunded LTL 2,874 – the sum which Galina Bogdel had paid for the plot of land.
27.  The applicants lodged an appeal on points of law. They argued that the lower courts had erred in interpreting the legal norms on the calculation of the limitation period, and the starting date of that term in particular. They did not argue that the courts had acted in a discriminatory fashion when interpreting the public authorities’ civil action, compared with civil actions between private parties. They also submitted that the annulment of the land purchase agreement had breached their right of property, without in any way complaining that the sum they had received in restitution had been too little.
28. On 10 May 2006 the Supreme Court dismissed the applicants’ appeal, endorsing the reasoning of the lower courts. It observed that at the time when the lease and sale contracts were concluded in 1994-1995, the 1964 Civil Code (Articles 84 and 86) had provided for a three-year statutory time-limit for initiating court proceedings. It had been established in the case that the HVCA had learned of the breaches of the law by those transactions on 3 July 2000, from the report by the SAO. Accordingly, when lodging its claim for the annulment of the land lease decision and the decision to sell the plot of land to Galina Bogdel, the HVCA had not missed the three-year statutory deadline. In the view of the Supreme Court, it would have been unreasonable to calculate the term of statutory limitation from 10 February 1995, the date when the land was sold to Galina Bogdel, because when the counties had been created [in 1995] the administration of each county had not been entrusted with the task of reviewing all the administrative decisions and contracts which the municipalities falling under its competence had adopted or concluded in the past.
29.  As to the applicants’ argument that there were no legal barriers to their owning the plot of land in question, the Supreme Court noted that the Trakai Historical National Park had been created by the Supreme Soviet (Aukščiausioji Taryba, the parliament of the Republic of Lithuania at that time) on 23 April 1992, and by a Government resolution of 22 April 1992 the old town of Trakai had been recognised as an urban heritage site (urbanistinis draustinis). For that reason, on 25 May 1992 the regulations on cultural heritage established that the plot of land situated at 41 Karaimų Street was not to be privatised. Moreover, on 9 November 1993 the Law on the Protected Territories had been passed by the Seimas, providing that land in State-protected areas was not to be sold. Subsequently, by decision no. 395v of 22 December 1993, the Trakai District Council had approved a territorial plan for Trakai old town which specified that the plot of land in question was not to be privatised.
30.  On the basis of the above, the Supreme Court held that the lower courts had been correct in quashing the Trakai municipal authorities’ decisions of 27 July 1994 and 18 January and 10 February 1995 leasing and selling the plot of land to Galina Bogdel. Moreover, the appellate court had been correct in applying the restitution procedure and refunding to the applicants the sum of LTL 2,874.
31.  The Government submitted that after the final decision by the Supreme Court, the applicants’ property rights to the café built on the plot of land situated at 41 Karaimų Street had remained unchanged. Moreover, it can be seen from the documents submitted by the Government that after the Supreme Court’s decision the HVCA still granted the applicants’ request to lease the plot of land in question for a period of eighty-seven years. On 16 November 2006 two lease agreements were thus concluded – 34 square metres were leased to Snežana Bogdel, and 100 square metres were leased to Piotras Bogdel.